BILL NUMBER: AB 1901	CHAPTERED  09/30/00

	CHAPTER   957
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 29, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	AMENDED IN SENATE   AUGUST 29, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   MARCH 23, 2000

INTRODUCED BY   Assembly Member Steinberg
   (Coauthors:  Assembly Members Cedillo, Hertzberg, and Lowenthal)
   (Coauthors:  Senators Alarcon and Burton)

                        FEBRUARY 11, 2000

   An act to amend Section 50675.4 of, and to add Section 50898.2 to,
the Health and Safety Code, relating to housing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1901, Steinberg.  Housing:  construction:  prevailing wages.
   The existing Multifamily Housing Program administered by the
Department of Housing and Community Development requires a project
sponsor to agree to set and maintain affordable rent levels for
assisted units in order to be eligible to receive a loan.  Also,
provisions of AB 2870, which has been enacted and will become
operative January 1, 2001, to be known as the Downtown Rebound
Program, require the department to make grants and loans for
specified urban housing projects, subject to specified restrictions.

   This bill would additionally require project sponsors under both
of those programs to agree to pay prevailing wages with respect to
construction, as specified.  The bill would require the department to
require, as a condition of loan closing, a signed certification that
prevailing wages have been or will be paid.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 50675.4 of the Health and Safety Code is
amended to read:
   50675.4.  (a) To be eligible to receive a loan, a proposed project
shall involve one or more of the following activities:
   (1) The development and construction of a new transitional or
rental housing development.
   (2) The rehabilitation, or acquisition and rehabilitation, of a
transitional or rental housing development.
   (3) The conversion of a nonresidential structure to a transitional
or rental housing development.
   (b) In the case of rehabilitation projects, to be eligible to
receive a loan, the loan shall be necessary to avoid increases in
monthly debt service that have either of the following effects:
   (1) Result in rent increases causing permanent displacement of
persons of lower income residing in the development prior to
rehabilitation.
   (2) Make it economically infeasible to accept subsidies available
to provide affordable rents to persons of lower income, if the
sponsor agrees to accept the subsidies.
   (c) To be eligible to receive a loan, the sponsor shall agree to
both of the following:
   (1) To set and maintain affordable rent levels for assisted units.

   (2) To the payment of prevailing wage rates with respect to
construction assisted through the program.  In implementing this
paragraph, it is the intent of the Legislature that this requirement
apply to construction work that is dependent on the commitment of
program funds in order for construction to proceed.  Notwithstanding
any other provision of law, the department's enforcement
responsibilities shall be limited to the imposition of this
requirement through the lending documents.  The department shall
require, as a condition of loan closing, a signed certificate that
prevailing wages have been, or will be, paid in conformance with the
requirements of Chapter 1 (commencing with Section 1720) of Part 7 of
the Labor Code and that labor records shall be made available to any
enforcement agency upon request.  The requirements of this paragraph
shall not apply to projects for which program funds are used
exclusively to achieve lower rents and to pay associated
administrative costs.
  SEC. 2.  Section 50898.2 is added to the Health and Safety Code, to
read:
   50898.2.  (a) Funds awarded pursuant to Item 2240-107-0001 of
Section 2.00 of the Budget Act of 2000 for the purposes of the
Downtown Rebound Program established pursuant to this chapter shall
not be subject to the requirements of Chapter 2.5 (commencing with
Section 11340) of Part 1 of Title 2 of the Government Code.
   (b) The department may use up to 5 percent of the amounts
appropriated for this program for administration.
   (c) With respect to the appropriation in Item 2240-107-0001 of
Section 2.00 of the Budget Act of 2000 for the Downtown Rebound
Program established pursuant to this chapter, the following
provisions shall apply:
   (1) Seventy-six percent of that appropriation shall be used by the
department for the purpose of making loans to project sponsors for
the adaptive reuse of vacant or underused commercial or industrial
structures into residential rental housing units for initial rental
to households having an income not exceeding 150 percent of the area
median income, subject to the following restrictions:
   (A) Loans for units not subject to subparagraph (D) shall be at 5
percent simple interest.  Loans for units subject to subparagraph (D)
shall be at 3 percent simple interest.  All principal and interest
shall be due and payable in 20 years.
   (B) Assistance for units not subject to subparagraph (D) shall not
exceed twenty thousand dollars ($20,000) per unit.  Assistance for
units subject to subparagraph (D) shall not exceed forty thousand
dollars ($40,000) per unit.
   (C) The amount of the loan, in combination with all debt recorded
in a senior position to the loan, shall not exceed 90 percent of the
appraised after-rehabilitation value of the security for the loan.
   (D) Twenty percent of the units in the project shall be reserved
for households having an income equal to 50 percent or less of the
area median income, or 40 percent of the units shall be reserved for
households having an income equal to 60 percent or less of the area
median income.  The department shall ensure the continued
affordability of all units designated by the sponsor to fulfill these
requirements for a period of 20 years.  However, notwithstanding
subparagraph (A), if assistance is provided for these units through
any program funded through Chapter 6.7 (commencing with Section
50675) of Part 2, the units shall be subject to the use restrictions,
limitations, and provisions contained in that chapter.  These units
shall be reasonably distributed within each building contained in the
project, with no less than 10 percent of the units in each building
fulfilling the requirements of this subdivision.
   (E) The sponsor shall agree to the payment of prevailing wage
rates with respect to construction assisted through the program.  In
implementing this subparagraph, it is the intent of the Legislature
that this requirement apply to construction work that is dependent on
the commitment of program funds in order for construction to
proceed.  Notwithstanding any other provision of law, the department'
s enforcement responsibilities shall be limited to the imposition of
this requirement through the lending documents.  The department shall
require, as a condition of loan closing, a signed certificate that
prevailing wages have been, or will be, paid in conformance with the
requirements of Chapter 1 (commencing with Section 1720) of Part 7 of
the Labor Code and that labor records shall be made available to any
enforcement agency upon request.
   (2) Two million four hundred thousand dollars ($2,400,000) of that
appropriation shall be used by the department for planning grants as
specified in subdivision (b) of Section 50898.1.
   (3) The balance of that appropriation shall be available for uses
authorized by subdivision (a) of Section 50898.1.
  SEC. 3.  Section 50898.2 of the Health and Safety Code, as added by
Section 2 of this act, shall supersede Section 50898.2 of the Health
and Safety Code, as added by Chapter 83 of the Statutes of 2000,
which section shall not become operative.
